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Membership Interest Sales Agreement for Australia

Membership Interest Sales Agreement Template for Australia

A comprehensive legal agreement governed by Australian law that facilitates the transfer of membership interests from one party (the seller) to another (the purchaser). The document addresses key aspects including purchase price, warranties, completion requirements, and regulatory compliance under Australian corporate law. It incorporates necessary provisions for the transfer of ownership rights, obligations of parties, and includes specific requirements under the Corporations Act 2001 and other relevant Australian legislation. The agreement serves as a binding contract that protects both parties' interests while ensuring compliance with Australian legal and regulatory requirements.

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Membership Interest Sales Agreement

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What is a Membership Interest Sales Agreement?

The Membership Interest Sales Agreement is a crucial legal document used in Australian business transactions when transferring ownership interests in a company, partnership, or other business entity. This agreement is essential when members wish to sell their interests to either existing members or third parties, ensuring compliance with Australian corporate law and regulations. The document typically includes detailed provisions about the sale price, payment terms, warranties, and both pre- and post-completion obligations. It's particularly important in private company transactions and must comply with the Corporations Act 2001 and other relevant Australian legislation. The agreement should be tailored to address specific requirements of the business structure, any existing member agreements, and necessary regulatory approvals, including FIRB approval for foreign purchasers.

What sections should be included in a Membership Interest Sales Agreement?

1. Parties: Identifies and provides full details of the seller(s) and purchaser(s) of the membership interests

2. Background: Outlines the context of the transaction, including details about the entity whose membership interests are being transferred

3. Definitions and Interpretation: Defines key terms used throughout the agreement and sets out interpretation rules

4. Sale and Purchase: Details the membership interests being sold and purchased, including percentage/units

5. Purchase Price: Specifies the purchase price and payment terms

6. Completion: Sets out the completion date, location, and actions required at completion

7. Seller's Warranties: Warranties given by the seller regarding ownership, authority to sell, and status of membership interests

8. Purchaser's Warranties: Warranties given by the purchaser regarding authority to purchase and financial capacity

9. Pre-Completion Obligations: Obligations of both parties between signing and completion

10. Post-Completion Obligations: Actions required after completion, including notifications and registrations

11. Confidentiality: Obligations regarding confidential information

12. Notices: Process for giving formal notices under the agreement

13. General Provisions: Standard boilerplate provisions including governing law, entire agreement, and amendments

14. Execution: Formal execution block for all parties

What sections are optional to include in a Membership Interest Sales Agreement?

1. Security for Payment: Include when payment is not made in full at completion

2. Third Party Consents: Include when transfer requires consent from other members or third parties

3. Foreign Investment Approval: Include when purchaser is foreign and FIRB approval is required

4. Tax Indemnity: Include when specific tax risks need to be allocated between parties

5. Non-Competition: Include when seller should be restricted from competing post-sale

6. Earn-out Provisions: Include when part of purchase price is contingent on future performance

7. Break Fee: Include when parties want to specify damages for non-completion

8. Management Transition: Include when seller has management role that needs transition

What schedules should be included in a Membership Interest Sales Agreement?

1. Schedule 1 - Membership Interest Details: Detailed description of membership interests being transferred

2. Schedule 2 - Company/Entity Information: Key details about the entity whose interests are being transferred

3. Schedule 3 - Completion Requirements: Detailed list of documents and actions required at completion

4. Schedule 4 - Warranties: Detailed warranties given by seller regarding the business and membership interests

5. Schedule 5 - Encumbrances: List of any existing encumbrances on the membership interests

6. Schedule 6 - Required Consents: List of third party consents required for the transfer

7. Appendix A - Transfer Forms: Prescribed forms for transferring membership interests

8. Appendix B - Entity Constitution: Copy of current constitution or governing document of the entity

9. Appendix C - Existing Member Agreement: Copy of any existing shareholders/members agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok˰ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Australia

Publisher

tiktok˰

Sector

Cost

Free to use
Relevant legal definitions













































Clauses






































Relevant Industries

Professional Services

Financial Services

Technology

Manufacturing

Real Estate

Healthcare

Retail

Mining and Resources

Agriculture

Construction

Education

Hospitality

Transport and Logistics

Media and Entertainment

Energy

Relevant Teams

Legal

Corporate Finance

Compliance

Risk Management

Corporate Governance

Executive Leadership

Business Development

Mergers and Acquisitions

Investment

Company Secretariat

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Corporate Lawyer

Legal Counsel

Company Secretary

Managing Director

Business Development Manager

Investment Manager

Compliance Officer

Due Diligence Officer

Corporate Advisory Manager

Partnership Manager

Business Owner

Director of Operations

Risk Manager

Transaction Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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